Modi rally draws retail investors

“The uncertainty on the political front is not there any more and investors are eager to ride the fresh bull-wave,” said K Sandeep Nayak, executive director and chief executive, Centrum Broking.

Re-activation of dormant or inactive demat accounts has also boosted the retail trading volumes in stock exchanges.

“Volumes in the cash market have almost doubled since the election results came out. “This has also led to a rise in brokerages, which have risen by almost twice the amount seen in the previous years,” said Nayak.

Brokers say the activity so far is restricted to existing clients but market conditions are ripe for entry of first-time investors, too.

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Image: Heightened volatility and a sharp fall in the market after the 2008 financial crisis had dismayed retail investors.Photographs: Courtesy, Ebay

Modi rally draws retail investors

“We saw massive liquidation and restructuring of portfolios. Basically investors who were saddled with the junk of the previous rally are a relieved lot,” said Rahul Rege, business head, retail, Emkay Global Financial Services.

While many are hailing the return of the retail investors, others are awaiting more signs before jumping the gun.

“We are yet see significant incremental flows from retail participants,” said a broker.

They said investors, ‘scarred from the carnage’ seen in the past five years, were still wary of equities as an asset class.

“The retail investor is going to be extremely cautious this time.

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Image: About 12 million retail mutual fund folios had been closed since 2009.Photographs: Reuters